While Monday marked the first week of Spring, green failed to materialize in the markets. Sentiment soured a little for the first time on President Trump’s ability to accomplish his promised pro-growth policies of tax reform and stimulus. Also, health care reform appears to have met an impasse in the House, and a lot of investors are waiting for the next catalyst.
At issue, the growing doubts that tax reform, infrastructure spending, and deregulation will take longer to pass than initially thought. Optimism after the presidential election led markets higher on the premise that a lot of what the President campaigned on could be implemented quickly. Markets shot higher, and valuations became stretched. However, opposition within the President’s party was not fully appreciated, and President Trump’s strong-arm business style flies in the face of the long-standing tradition of “horse trading” otherwise known as politics.
President Trump wasn’t the only one having a difficult week. Sears stock declined over fifteen percent as the company warned it might not continue to be a “going concern.” While this doesn’t come as a surprise, it is unusual for a company to make such a statement unless there is a good cause. It should be noted Sears still retains 15-20% of the appliance market and 10-15% of the tool market. Continued declines at Sears could be a win for the likes of Home Depot and Lowes. On another note, Google had a difficult week after several large advertisers, including Verizon, AT&T, Johnson and Johnson, and JP Morgan, announced they are freezing advertising on non-search properties of Google. Apparently, ads from these companies were placed next to content promoting terrorism and hate on YouTube (which is owned by Google). Google issued a mea culpa and promised to give companies more control over where their ads appear.
Not to be forgotten, England is still in the process of decoupling from the European Union. Prime Minister Theresa May will formally write to the European Union next Wednesday to announce Britain’s withdrawal from the bloc. If all goes according to the two-year negotiations set out in the official timetable, Brexit should happen in March 2019. Also on the radar, Greece is set to miss yet another deadline for unlocking bailout funds, edging closer to a repeat of the 2015 drama that pushed Europe’s most indebted nation to the edge of economic collapse. So if it makes you feel any better, the United States, while undergoing some dysfunction, remains the best place to invest.
In closing, I discovered I’ve been doing something wrong for a long time. In fact, I’d bet many of you may be as surprised as I was upon learning that you should never put two spaces after a period. How can it be wrong when we were taught this so many years ago? You can blame it on the electric typewriter (yes, that dates me). As typesetting became more widespread in early 20th century Europe, its practitioners adopted best practices. Among those was the use of a single space following a period. Every major style guide – including the Modern Language Association Style Manual and the Chicago Manual of Style – prescribes a single space after a period. Most people would know the one-space rule if it weren’t for a quirk of history. It comes down to the electric typewriter circa 1950. Electric typewriters used monospace type – that is, every character occupies an equal amount of horizontal space. This is in contrast to proportional type which typesetters used. Monospace type gives you text that looks “loose” and uneven. Hence the adoption of the two-space rule. On a typewriter, an extra space after a sentence makes text easier to read. Here’s the thing, Monospaced fonts went out in the 1970s. While I intellectually understand the rule, this habit thirty years in the making may be hard to break. Please don’t fault me. Now you know.
March 24, 2017